This copy is for your personal non-commercial use only. To order presentation-ready copies of Toronto Star content for distribution to colleagues, clients or customers, or inquire about permissions/licensing, please go to: www.TorontoStarReprints.com

Firm lays off Canadians, sells Ottawa U.S. trucks

The Canadian Auto Workers is criticizing the federal government for awarding a $254 million contract to a U.S. company to build trucks for the Canadian Forces at its plant in Texas while it is laying off workers at its plant in Chatham.

Navistar International Corp. sent out 500 layoff notices to its workforce at this Chatham plant in early January 2009. Meanwhile, the U.S. company is building trucks for the Canadian Forces at its plant in Texas. (DIANA MARTIN / THE CANADIAN PRESS)

The Canadian Auto Workers is criticizing the federal government for awarding a $254 million contract to a U.S. company to build trucks for the Canadian Forces at its plant in Texas while it is laying off workers at its plant in Chatham.

"Somebody has to explain to us why Canadian workers can't build military trucks for the Canadian military," said senior CAW executive Bob Chernecki, referring to a defence department contract to Illinois-based Navistar International Corp. to build 1,300 medium-duty trucks for the Canadian Forces.

Navistar sent out 500 layoff notices to its Chatham workforce last week, with another 200 expected in the spring. Chernecki said that would leave only 200 workers and the plant's survival is at stake.

"At the plant this morning, our guys were just dumbfounded; they're mad as hell," he said. "In the face of (layoffs) over the next few months, there is no legitimate credible reason" for Ottawa's decision.

"Doesn't the government know there's a manufacturing crisis in Canada?" he asked.

Article Continued Below

CAW officials plan to ask Navistar executives – whom they are already slated to meet today over the Chatham layoffs – to switch the order from Garland, Tex., to Canada.

Asked yesterday why the contract couldn't have stipulated the trucks be built in Canada, a spokesperson for Defence Minister Peter MacKay referred the Toronto Star to the public works department.

"Minister MacKay's role is to outline what equipment and platforms are needed by the Canadian Forces," the defence department official said in an email.

"After identifying the need, Public Works follows a competitive procurement process."

But the public works department referred the question to Industry Canada and, in the end, there appeared to be no answer.

Yesterday, CAW president Ken Lewenza sent a letter to MacKay, asking him to "provide the necessary leadership to invest in Canada by having these vehicles built in Canada."

Navistar spokesperson Ray Wiley said the trucks couldn't be built in Chatham.

Wiley challenged Chernecki's assertion the line could accommodate the medium-duty trucks.

"The Chatham plant builds heavy-duty trucks; these are much smaller trucks ... that wouldn't fit on the assembly line," he said from Warrenville, Ill.

Chernecki said the 1,300 military trucks, which are to replace a fleet that dates from the 1980s, could be built with "very little or no adjustment in Chatham," or at another of the truck plants in Canada under threat of closing due to the manufacturing meltdown.

They include Freightliner in St. Thomas and Paccar in Ste. Thérèse, Que. Workers at both plants are represented by the CAW.

While both Chatham and St. Thomas facilities are said to be "heavy-duty" facilities, Paccar's Quebec plant describes itself as building "medium-duty" vehicles in various company releases online.

"The workers in these facilities absolutely deserve the support of their government as we go through these very difficult and challenging times in our country," said Lewenza's letter.

"It seems the federal government has lost sight that in 2003 they invested in the Chatham facility, by agreeing to provide over $30 million of assistance to Navistar to maintain these important jobs in the community and Ontario," he told MacKay.

"The same holds true in Quebec, where the provincial government has been working closely to ensure that the Paccar facility remains viable."

In 2003, the Ontario government gave $35 million to Navistar to avert threatened closing of the Chatham plant.

The $254 million contract for the military vehicles, described as the "logistics backbone" for transporting equipment and supplies within Canada, is a rush order. Work is to begin at Navistar's Texas facility this summer and finish within 18 months.

Chernecki called it "nonsense" for Finance Minister Jim Flaherty to promise to boost the Canadian economy with infrastructure jobs in the Jan. 27 budget, while another department "is putting taxpayer dollars into the U.S. economy."

"Don't they talk to each other?" he asked of the finance and defence ministers.

"There is a crisis in this country, and, in the province of Ontario, it's massive."

In announcing the contract last Friday, MacKay focused on stipulations in it that benefit Canada.

A regional benefits clause requires Navistar to match the $254 million contract with equal investment in Canada.

"We'll have mechanics working on these trucks," said MacKay.

"The supplies, the parts and the gas that are used in conjunction with the trucks will obviously be Canadian."

The minister also noted the tires will be supplied by Michelin's plant in Waterville, N.S. "Whoopee," Chernecki said.

He added: "I understand these will be North American vehicles and our Navistar Canadian dealer network is part of the program to provide parts and service."

The benefit clause reportedly spreads work over seven years, a term the CAW says is too long with the economy in crisis now.

"It's clearly unacceptable to use Canadian tax dollars to have these vehicles built in the United States," said Lewenza's letter to MacKay.

"If you are going to try and stimulate the economy in Canada – and specifically, where manufacturing is at an all-time low and job loss is unprecedented – your government must recognize how critical it is to ensure that Canadian tax dollars are spent to put Canadians to work."

More from the Toronto Star & Partners

LOADING

Copyright owned or licensed by Toronto Star Newspapers Limited. All rights reserved. Republication or distribution of this content is expressly prohibited without the prior written consent of Toronto Star Newspapers Limited and/or its licensors. To order copies of Toronto Star articles, please go to: www.TorontoStarReprints.com